Generally speaking, there are two types of violation in relation to the board of directors’ resolution: procedural violation and substantial violation. Procedual violation refers to situations such as meetings of the board of directors are held with less than half of the directors presented or resolutions of the board of directors are adopted with less than half of all directors.Under such circumstances, shareholders have the right to require the court to recall the resolution.Substantial violation means resolutions of the board of directors violate law, administrative regulation or the company’s articles of association. For example, the board of directors in some publicly listed companies makes restrictions on shareholders about transfering their shares on purpose to prevent possible outside intervention. It requires that any large amount of shares transfer should acquire permission of the board of directors. Otherwise, such transfer is invalid. Obviously, such restriction deprives shareholders of their lawful right of shares transfer endowed by the Corporation Law. They can require the court to declare the restriction invalid.
The Corporation Law makes no details about the way shareholders lodge the complaint. In America, there are two ways. The one is that shareholder lodges the complaint directly in his/her own name. For example, the complaint that shareholder asks to be paid dividened or mandatory dividened which has already been legally declared.2 The other is shareholders representative complaint. For example, directors, officers, or controlling shareholders offend the fiduciary duty .Comparatively speaking, the latter has become the more important way of remedy for most shareholders to supervise the company’s operation and prevent possible power abuse. Therefore, it’s necessary to learn from America’s practice and make details of shareholders’ right to lodge the complaint.
二、Restriction on the board of directors from shareholders’ general meeting
According to the Corporation Law, directors are elected by shareholders’ general meeting. The principle of ‘one share, one voting right’ and majority rule universally recognized by modern corporate legislation enables large shareholders to send their representatives to the board of directors. Many directors represent the interest of their respective large shareholders. Any daily decision made by the board of directors or proposal raised by it for voting during shareholders’ general meeting actually embodies the will of large shareholders. Considering above fact, seemingly there is no need for large shareholders to restrict the power of the board of directors. Even if necessary, it’s out of consideration to reconcile interest conflict among large shareholders. It has been proved by the history of company’s development that any changes in corporation law doesn’t affect the realization of large shareholders’ interest. It’s really a harsh reality. However, the protection of middle and minor shareholders’ interest, which is easily infringed by power abuse of large shareholders and their representatives as directors, is a special field in modern time.3 In fact, realization of restriction on the board of directors from shareholders’ general meeting is a problem that what measures should be taken to ensure middle and minor shareholders have enough strength to prevent large shareholders’ possibe power abuse and therefore, to prevent the board of directors’ power abuse.
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